When a Brain Balance franchise is transferred, is the purchaser required to pay an Initial Franchise Fee?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
(120) days after delivery of such offer to COMPANY, or upon substantially the same terms of the sale as specified in such offer, COMPANY shall again have the right of first refusal as herein provided.
COMPANY's written approval of the proposed sale to the named purchaser, if given, shall be conditioned upon the following:
- (a) Only the entire interest of FRANCHISEE under this Agreement may be assigned or transferred.
- (b) Unless the assignee or transferee is a franchisee of COMPANY, the assignee or transferee shall undertake and successfully complete COMPANY's Initial Training Program at a location designated by COMPANY at the assignee or transferee's expense.
- (c) The proposed assignee or transferee shall meet the standards then imposed by COMPANY for new franchisees and shall demonstrate to COMPANY's satisfaction the ability to operate the business being transferred. FRANCHISEE shall provide COMPANY with a resume, credit check, and all such other information reasonably required by COMPANY with respect to the proposed assignee or transferee who shall be personally interviewed at a location designated by COMPANY at no cost to COMPANY.
- (d) The assignee or transferee executing both (x) a new 10-year franchise agreement in the form being used at the time by COMPANY for this franchise program, which agreement shall govern the rights and obligations of the parties, provided, however, the purchaser will not be obliged to pay an Initial Franchise Fee, and the Royalty as set forth in this Agreement shall not be altered, and (y) such other documents as COMPANY shall reasonably request in form and substance satisfactory to COMPANY.
- (e) FRANCHISEE shall have paid to COMPANY a Transfer Fee, the amount of $10,000 for the training, supervision, administration, accounting, legal, and/or other expenses of COMPANY in connection with the assignment and transfer.
- (f
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, a purchaser in a franchise transfer is not required to pay an initial franchise fee. However, this is conditional upon the purchaser executing a new 10-year franchise agreement. The royalty fees, as outlined in the original agreement, will remain unchanged.
Even though the initial franchise fee is waived, the assignee or transferee must still meet Brain Balance's standards for new franchisees. This includes demonstrating the ability to operate the business successfully and completing the company's Initial Training Program, unless they are already a Brain Balance franchisee. The cost of this training program is borne by the assignee or transferee.
In addition to these conditions, the franchisee transferring the business must pay Brain Balance a Transfer Fee of $10,000. This fee covers the expenses related to training, supervision, administration, accounting, and legal aspects of the transfer. The franchisee's transferee is also responsible for paying a Software Agreement transfer fee of $2,500. These fees are essential to finalize the transfer process with Brain Balance.